Banks and insurance companies are big spenders when it comes to investing in advertising and marketing, as they duke it out in an increasingly competitive and fragmented marketplace. They are fighting for brand recognition and market share but in addition, spend a lot of time, effort and money educating consumers about new products and services and new technologies.
As such, they accounted for 10% of promo product revenues in 2013, up a tad over two percentage points from 7.8% in 2012.
In addition to their own core businesses, many financial service and insurance companies are branching out into other related, niche sectors. “They don’t want to pigeonhole themselves,” says Kathy Whitburn, strategic marketing consultant at American Solutions for Business (ASB), (asi/120075). Traditionally financial, life insurance and banking were separate entities. “Now many of these companies are offering all three services, promoting the concept of ‘financial health,’ or complete asset protection, all melded into one big corporate family. And all vying for your business,” she says.
Tap Into Trust Issues
With a direct connection to consumers’ wallets and bank accounts, it’s critical that financial service and insurance companies convince potential buyers or investors that they are rock solid, trustworthy, easily accessible and affordable. It’s equally important that providers educate consumers about the many options and offerings available in order to connect with and capture their business.
PwC’s report on the retail banking industry, “2020 Evolution or Revolution” shows that nearly all bankers polled view attracting new customers as one of their top challenges, although they also note the need to “deepen customer relationships and focus more on specific customer outcomes.”
Banks of all sizes tend to allocate about 0.073% of their total assets to marketing, according to a Financial Brand article published earlier this year. It surveyed the bank marketing budgets of 256 U.S. banks with assets ranging from $250 million to as high as $175 billion. Those on the smaller end of the scale tend to spend more heavily on marketing. “Banks between $500 million and $ 1 billion might allocate proportionately more to marketing than other asset tiers because they are so heavily growth oriented,” the report states. “Once a bank hits $1 billion, there’s a little less pressure and it’s got a bit of a cushion. But getting to that first billion takes hard work and extra marketing muscle.”
The car insurance industry has been in an ongoing advertising spending war. Data provider SNL Financial reports that GEICO and its green lizard mascot tops the list among car insurers in ad spending, reportedly spending just over $1 billion in 2012. It appears to have paid off, as GEICO recently topped Allstate Corp. to become the nation’s second largest insurer, behind State Farm.
Consequently, banking and insurance offer abundant opportunity for the advertising specialty industry to offer marketing solutions to meet all of the many needs of these two sectors. Here’s how to stake a claim in these hot markets.
LOCAL NETWORKING PAYS OFF
“This is a very competitive segment and networking is critical,” says ASB’s Whitburn. Get involved in local clubs and organizations, such as the Chamber of Commerce or business networking groups, she recommends. “You need to be there on a regular basis. It helps to have facial recognition in your local community. “Start at the base level, perhaps connecting with a local loan officer,” she says. “If you hit it off, stay in touch and they’ll move you up within the organization. It’s important to establish trustworthiness in order to navigate each tier.”
It can be harder to break in at the corporate level of some of these companies, as they may have national contracts with specific suppliers, but sometimes the local officers can use whomever they want, says Whitburn. “These people you’re networking with at the local level may be involved with ancillary businesses like title or mortgage insurance, or real estate,” she says. “These individuals will be your greatest resource for ‘warm referrals.’”
Peggy Peugh, account executive at HALO Branded Solutions (asi/356000), derives the largest part of her business from banks and insurance companies, and she says both sectors are putting their marketing efforts into educating kids about insurance and finance. “During the recession people were watching every penny,” she says. “Now they are trying to teach youth how to save money.” Some companies are taking financial literacy campaigns to local schools.
Targeting children can give banks a competitive edge. “With banks popping up on every corner, they are fighting for consumers in those neighborhoods,” ASB’s Whitburn says. “If Grandma and Grandpa are account holders at local banks, it’s smart to promote that bank’s services to their children and grandchildren.”
The earlier you can reach them, the better. The goal is to get kids to see the bank or insurance company’s logo early on, so that as they get older and it’s time to buy insurance or to invest their money, they are already familiar with the brand, says Peugh.
One of her clients provided kids with clear, branded piggy banks, customized with two slots at the top labeled “donate” and “save.” It was a great way for kids to watch their money grow, and also gave them an opportunity to make financial decisions, such as where to donate or to spend part of their savings.
Participating in local events and getting involved in the community is a great way for financial service companies to instill trust, touching families and getting them to invest. “This industry is referral driven,” says Whitburn. “If a bank or insurer participates in or hosts a positive community event, it sends a message that they can be trusted to handle the potential clients’ finances.”
Peugh’s clients host many events with youth service clubs. “They want to engage kids and get them involved in community days, like Earth Day,” she says. Such activities promote a positive message which the client hopes will connect with the brand and that kids will remember when they grow up and are in a position to invest.
ASB’s Whitburn suggests items like drawstring bags, reflective products for bikes, rulers and coloring books as potential giveaways at local events targeted to kids.
TARGET THESE NICHES
Promotional products can be used to increase brand loyalty and morale internally among the workforce as well, says Michael Londe, director of sales for Summit Group (asi/339116). In particular, he suggests targeting the customer call center. “There is a lot of turnover, and it’s a hard job,” he says. People never reach out to the call center to thank them, only to complain or ask for help. “Companies need to incentivize these employees, train and motivate them so that they have a positive impact on a customer’s experience with the brand,” he says.
“Human resources is an important sector because they lure and retain the best talent,” says ePromos’ Promotional Products’ (asi/188515) account manager, Caren Aardema. Job recruiting on college campuses is a hot sector for promotional products. The recruiting companies are competing with each other to land the best graduating students, Londe points out. He recommends inexpensive yet functional products bearing the recruiter’s contact information, such as inexpensive stylus pens, microfiber cloths and drinkware.
Brand Fuel Promotions’ (asi/145025) Co-President Danny Rosin says financial planning and wealth management are strong niches, and mobile banking in particular is hot. “Banks are trying to get their clients to use mobile banking apps, a cost-effective alternative to the cost of real estate and human capital,” he says. “Cash is no longer king in the banking world. The trend toward virtual currency creates new opportunities for banks and promotional product consultants. There is a need to teach their customers how to adapt to the new technologies.”
Rosin suggests products to reinforce that message, such as microfiber wipes, credit card pockets and Popsockets (www.popsockets.com).” At a higher price point, Rosin suggests power banks, headphones, speakers and items that relate or can be used with a mobile phone.
Rewarding top producers and top clients is another lucrative segment of the industry. Providing incentives for agents to reach certain goals is one way, says Peugh. She suggests smaller items like logoed leather padfolios or briefcases would be appropriate for hitting monthly milestones. Companies can raise the bar and offer higher-valued items for achieving quarterly goals. A typical price point might be $80-$200 and could be a gift card or an item like a logoed patio umbrella that an agent would be proud to share in their home and convey to friends and family that the agent has attained or exceeded an important goal.
Companies in this space often award top producers with destination trips, and supply an array of high-end promotional items to enhance the experience. “It varies by company, but some clients spend as much as $200-$300 per winner,” says Londe. Usually the winner receives a logoed, tech-friendly or travel bag, plus multiple items including apparel (perhaps a jacket), mobile phone accessories such as a portable charger, headphones or earbuds. They may also include items like customized towels, depending on the destination.
One of Whitburn’s wealth-management clients holds an annual event for its top-tier investors, with the dual purpose of thanking the client for their business, as well as to bring in new accounts. The investor and spouse or guest are allowed to invite another couple to a fun event, like a major league baseball game or sporting event.
“The gifts I recommend have to be of medium perceived value, not high value, as the client doesn’t want to look like they spend frivolously,” Whitburn explains. Also, they must be good quality, and weight and functionality are important. She typically suggests items, like RFID passport cases, credit card cases, bamboo cutting boards , lipstick-sized power bank chargers and miniature LED flashlights that can go on a keychain.
“The mortgage banking sector is coming back, and is definitely worth approaching again,” Londe says. There are a number of opportunities in this space. Distributors can encourage clients to use promotional products internally to motivate office staff, such as the loan officer, as well as externally to real estate agents and homebuyers.